Well, I will take a stab at it, my approach may be totally wrong but just the process of debunking me may help you think it through and decide.
1yr LIBOR has been as low as 1.3% and as high as 7.4% in the past decade. 1yr LIBOR tends to move with 1yr Treasury, although admittedly the spread is high right now due to credit market turmoil. 1yr Treasury is low right now, 2%, due to Fed rate cuts and flight to safety. 1yr Treasury has been as low as 1.0% and as high as 6.3% in the past decade.
If 1yr LIBOR went to its lowest rate in the past decade, and your loan adjusted, your rate would be 3.55% ( = 1.3% + 2.25%). If I understood you right. If 1yr LIBOR went to its highest rate in the past decade, your rate would be 9.65%. Thats a range of potential post-adjustment rates of 3.55% to 9.65%, based on a 10-year history of 1yr LIBOR. The middle of that range is 6.6%.
If you had no insight into what rates will do in the future, no basis for making a bet, then you might guess that on Nov '09 1yr LIBOR is most likely to be somewhere in the middle of that range, with some but not a high chance of being at either extreme. Implying your post-adjustment rate is most likely to be somewhere around 6.6%, with some but not high chance of being closer to the extremes of 3.55% or 9.65%.
In that case, if you can refinance now at a fixed rate of 6.6% or lower, you might consider that the better choice.
How to make the thinking better? You could look at historical LIBOR and figure out more precisely the probability of different levels. Here is a source for monthly rate back to 1988.
http://www.moneycafe.com/library/libor.htm You might find that simply taking the mid-point of the two extremes is misleading, maybe the average LIBOR rate is actually higher or lower. And you might find that LIBOR is more or less normally distributed and then look at 1 and 2 standard deviation levels. That might help refine your estimate of where LIBOR is most likely to be, simply from a statistical approach.
You could also look at LIBOR over economic cycles, and then if you have a view on what the economy will look like in late '09, you might be willing to modify your bet on LIBOR, from merely a statistical one. For example, LIBOR tends to be high when the economy is strong and low when the economy is weak, much like 1yr Treasury. So, if you think we are entering a recession now, and if you think that recession will be over and the economy growing again by Nov '09, then you might want to move your bet higher. If you think the contrary, you might move your bet lower.
And, of course, you have to decide how much the certainty of a fixed rate is worth, the cost of refinancing, your willingness to walk away if the rate resets to an unaffordable level, and - very important - your view on whether the condo's value will be higher or lower by late 2009, and the cash flow implications of renting it. Since you're moving to PHX, I assume your interest in the condo is now purely as an investment property - the roof-over-head aspect is gone.